I installed security camera system for the customer and got check for my LLC. In that amount I spent about 90% for equipment. How can I deduct it?

[olegkomliev]

Second check for my labor I got in 2021, I guess I'll show that in next year income?

[ErnieS0]

Yes. You can deduct expenses connected with installing a security camera for a customer. 

You have an LLC but you did not say whether you are filing an LLC return for a partnership or corporation, or whether you are a single member LLC filing as a sole proprietor. Deduct your expenses on whatever form you are reporting your income on.

Payments received in 2021 are included in next year’s income if you are a cash basis taxpayer. If you use the accrual method, it may be different. Most taxpayers are cash basis.

Under the accrual method of accounting, you generally report income in the year it is earned (rather than paid) and deduct or capitalize expenses in the year incurred. The purpose of an accrual method of accounting is to match income and expenses in the correct year.

[olegkomliev]

Thank you. I am so glad somebody answering my question. Yes I am single member LLC. According to your answer, for a example if I got check for $5000 and bought cameras for $4000 then I can deduct all $4000, right? If yes that is awesome.  I just can’t figure out in which field I need to show that expense? 

[DavidD66]

Yes, according to your example, you can deduct the $4,000 of equipment you installed.  The other $1,000 would be your profit.  As for which field to enter that expense, you can add to Miscellaneous expenses and give it whatever description you would like.

[olegkomliev]

Got you. I was thinking to put them in Supplies (but description says only like hand tools not more than $200) or inventory (but it didn’t let me do it), so now I’ll use miscellaneous. Thank you!